Agenda item

A report from the Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Care is attached. This outlines proposals for investment in the private rented sector. (Report No.189, agenda part 2 also refers) (Key decision – reference number 3782)

(Report No.184)

(8.55 – 9.00 pm)

Councillor Ahmet Oykener (Cabinet Member for Housing) introduced the report of the Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Services (No.184) setting out proposals for investment in the private rented sector.

NOTED

1.               That Report Nos.189 and 189A also referred as detailed in Minute No.24 below.

2.               Councillor Oykener took this opportunity to express his thanks and appreciation to Hayley Coates for her hard work in moving this project forward.

3.               The extensive discussions which had taken place and the reasons for the proposals as set out in the report. The demand for temporary accommodation was significant and there were increasing pressures on housing supply for residents of the borough. The financial implications of the proposals were noted. This represented an innovative proposal which was financially viable and represented value for money for the Council and its residents.

4.               An amendment sheet was circulated at the meeting detailing a revision to paragraph 3.18 of the report regarding the initial company structure. Paragraph 3.18 to now read:

“Initially it is proposed that the board membership be as follows:

·       3 x Cabinet Members – one of whom will be the Chair. The Cabinet Members will be determined by Cabinet

·       Director of Finance, Resources and Customer Services – who will also be Company Managing Director

·       Assistant Director of Community Housing

·       Assistant Director Corporate Governance – who will also be the Company Secretary

·       2 Non-Executive Directors (to be remunerated)”

Initially the three Cabinet Members on the board membership would be as follows, as set out in decision 8 below: Cabinet Member for Finance and Property (Chair); Cabinet Member for Housing; and, Deputy Leader of the Council.

Alternative Options Considered: NOTED the alternative options which had been considered as set out in full in section 4 of the report.

DECISION: The Cabinet agreed

1.               The principle of utilising appropriate investment to develop a portfolio of houses (through a wholly owned company), subject to properties meeting the agreed financial criteria.

2.               To establish a company limited by shares, wholly owned by the Council in line with the proposed structure set out in sections 3.16 – 3.20, to own and manage the properties.

3.               Delegate to the Director of Finance, Resources and Customer Services, Director of Health, Housing and Adult Social Care, Cabinet Member for Finance and Property and the Cabinet Member for Housing authority via a portfolio decision to finalise the timing, profile of acquisitions and the detail of the funding arrangements for each phase of the portfolio development, based on the most viable finance stream available, type and level of housing need at that time, and the Council’s best interests, including but not limited to:

·       Approval of the terms of the investment

·       The terms of any guarantee to be provided to support the provisions of the investment

·       The term of any loan agreement between the Council and the Company

·       Such other mattes as are regarded as necessary to enable the provision of the investment and acquisition of the properties and their subsequent lettings and on-going management.

4.               To note that the investment model proposed was consistent with the viable options identified in the Framework of Investment in Key Decision No.3808, as detailed in paragraph 3.13 of the report.

5.               To delegate to the Director of Finance, Resources and Customer Services, Director of Health, Housing and Adult Social Care, Cabinet Member for Finance and Property and the Cabinet Member for Housing approval via a portfolio decision to finalise the terms of reference and Company Memorandum and Articles of the local authority company proposed and other such matters necessary to (i) incorporate and register the company and (ii) facilitate the objectives identified in the report.

6.               To note that all investment and treasury management decisions about future phases of the portfolio would be subject to the Council’s existing arrangements for governance and specialist advice.

7.               That an annual review would be undertaken to review financial viability of the property portfolio.

8.               The initial board membership would comprise the following 3 Cabinet Members:

Cabinet Member for Finance and Property (Chair)

Cabinet Member for Housing

Deputy Leader of the Council

RECOMMENDED TO COUNCIL to add this borrowing to the capital works programme.

Reason: There was a shortage of cost effective, value for money temporary accommodation in the borough, so rents were increasing, placing significant budgetary pressure on the Council. The reasons for the recommendations were set out in full in section 5 of the report.

(Key decision – reference number 3782)